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FERS Survivor Benefits: Should You Elect One?

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A survivor benefit is designed to help a surviving spouse in the event you (the federal employee) passes away in retirement. The survivor benefits you elect determine how much your spouse will receive from your FERS pension if you pass away first in retirement. If you’re married when you complete your FERS retirement application, you’ll need to elect a survivor benefit. However, deciding which benefit to elect can be tough as there are pros and cons to each.

Maximum Survivor Benefit

Your spouse receives 50% of your unreduced pension if you pass away first in retirement. Your monthly pension is reduced by 10%.

Partial Survivor Benefit

Your spouse receives 25% of your unreduced FERS pension if you pass away first in retirement. Your monthly pension is reduced by 5%*.

No Survivor Benefit

Your spouse will receive no survivor benefit if you pass away first in retirement. All FERS pension payments will stop at your death and eligibility for federal health insurance will end. Your monthly pension isn’t reduced*.

*Your spouse is automatically entitled to the Maximum Survivor Benefit UNLESS he/she consents to a Partial Survivor benefit or waives it entirely. If that’s the case, your spouse must complete Form 3107-2, Spouse’s Consent to Survivor Election.

Example: Max Survivor Benefit

Say you have an unreduced FERS pension of $1,000 a month and you elect the Max Survivor Benefit for your spouse. This reduces your pension by 10% to $900 a month. If you pass away first, your spouse will now receive 50% of the unreduced pension equal to $500 a month.

The Partial Survivor Benefit is the same concept except your monthly pension is reduced by 5% and your spouse would receive 25% of your unreduced pension.

This benefit becomes especially important when it comes to health insurance. Continuation in FEHB coverage is only available to a spouse who is eligible to receive a survivor pension. If you pass away first in retirement and your spouse wants to continue FEHB coverage, your spouse MUST:

  • Be entitled to receive a FERS survivor benefit (max or partial), AND
  • Have been enrolled in FEHB prior to your death

If your spouse elects to waive the survivor benefit, their FEHB terminated after your death.

Exception: If your spouse is an active FERS/CSRS employee or retiree and elected no survivor benefit, upon your death, they can elect their own FEHB coverage.

The survivor pension is a lifetime benefit for your surviving spouse. Your spouse receives monthly payments until they die UNLESS they remarry before the age of 55. If your spouse does remarry before age 55, the FERS survivor pension and any FEHB coverage terminate.

FLTCIP

If you pass away first in retirement and your spouse wants to apply for the Federal Long Term Care Insurance Program, they can only do so if he/she is entitled to a FERS survivor pension. If your spouse has waived the survivor benefit, they cannot apply for FLTCIP after your death. However, if your spouse already has a FLTCIP policy, their coverage continues for as long as they pay their premiums, regardless of the FERS survivor pension option you selected.

What Happens if My Spouse Passes Away First?

If you’ve elected a survivor benefit and your spouse passes away first, you’ll need to contact the Office of Personnel Management as soon as possible to report their death and complete the forms so OPM will stop reducing your FERS pension. There will be no refund of the money deducted during retirement, however.

It’s a tough decision you must balance between living with a reduced retirement income and providing for your spouse in the future. It’s a permanent decision so weigh the option carefully.